THE ECONOMY:

1st decline in inventories at wholesalers in 8 months

WASHINGTON — Inventories at wholesalers fell 0.1 percent in April, the first decline in eight months, as demand for pharmaceuticals, imported automobiles and other goods outpaced supplies.

The Commerce Department said Wednesday that wholesale sales rose 0.8 percent. That brought supplies at distribution centers, warehouses and terminals in April to a record low of 1.12 months' worth.

Lean inventories at wholesalers as well as factories suggest that companies may have to step up production and keep adding workers. Companies had been caught with too many goods on their hands in the 2001 recession, leading them to be cautious about adding stockpiles during the current expansion.

"Any attempt to rebuild inventories should translate into increased production, which in turn can only help employment and weigh in on the plus side" for economic growth, said Dana Saporta, an economist at Stone & McCarthy Research Associates in Princeton, N.J.

"Businesses have been running down inventories to keep up with demand," said Adrienne Warren, a senior economist at Scotia Capital Inc. in Toronto. "Inventories will need to be rebuilt over the coming year, and that will add to growth."

Total inventories fell by $156 million in April. The biggest declines included pharmaceuticals, at $812 million, and automobiles, at $262 million.

Inventories of durable goods, products made to last at least three years, were unchanged in April. Inventories of non-durable goods fell 0.2 percent, led by drugs, paper and petroleum.